Brexit and the Mill Hill economy

I thought I'd do a little study on how the a Brexit decision may affect the local Mill Hill economy. Being a layman with an interest in economic, clearly I am not the font of all knowledge, but in the absence of anything better, here are a few points of interest.

According to Network Rail, in 2014, there were over 2.4 million journeys made from Mill Hill Broadway Station. Add to that, nearly 1.3 million journeys from Mill East tube station. This gives some clue as to the nature of our suburb. There are over 18,000 residents and 6,000 housholds in Mill Hill ward. That means that every man, woman and child in the Borough makes over 200 train/tube journeys a year!

Of course the vast majority of these journeys are made by people with jobs in central London. There are some interesting statistics about London employment on the Mayor of Londons website. The City of London, destination for many commuters from Mill Hill had a total of 414,600 people employed in 2014. Of these 162,600 were employed in financial services and 106,000 were deemed "professional" (ie Lawyers, accountants etc). Both of these sectors are likely to be vulnerable to severe pressure from the effects of Brexit. Many foreign financial institutions are likely to review their operations in the event of a Brexit vote and none have stated that a UK outside of the EU is more likely to be attractive. Jamie Dimon, CEO of JP Morgan has gone on record as saying that up to 4,000 UK jobs could go. Whilst some Brexit commentators are sceptical and some say that the UK would be more attractive as it would "open up world markets", there is no actual evidence of this. Presumably if this was true, some organisations would have gone public and said so. So far the only well known companies to support Brexit are Wetherspoons and Dyson. Neither have a presence in Mill Hill. I suppose that you could make a case that in a recession, cut price pubco's sucha s Wetherspooons would do a bit better, as drinkers save money. As James Dyson has outsourced production to the outside of the UK and the EU, it seems that his company are unlikely to save the UK economy.

In 2010, the Financial services and Professional services industries in the City of London had 151,000 and 87,000 employees respectively, so there has been healthy job growth since the Coalition govt came was elected in 2010. Mill Hill is an extremely popular location for such people.as shown by the figures for commuting. If the financial services and professional services industries are damaged by Brexit, this will have a huge impact on Mill Hill and The Broadway.

When people lose jobs, spending on the cafe culture which has developed in the Broadway will be the first thing to be hit. If well paid jobs are not available in the City, then the boom we've had in property prices will come to a juddering halt. People will be left woth negative equity. Not everyone will see this as entirely negative. Some of us worry abut over development and gentrification. First time buyers may well be more than happy to see Mill Hill Property prices tumble.  As most current Mill Hill residents are owner occupiers, I suspect that this will not be generally popular.

If we look at employment in the London Borough of Barnet, the three biggest sectors are Health (19,400) retail (16,400) and Education (16,000).  How are these likely to be affected in Mill Hill? Well we are losing a substancial number of jobs in Health anyway, as the National Institute for Medical research moves out. We are already seeing shortages of nurses and other medical professionals. A Brexit will make it harder for the NHS in Barnet to attract staff. Many people working in hospitals and doctors surgeries are EU migrants. A common argument made by Brexit supporters is that the NHS cannot support the current levels of migration. This ignores the fact that most EU migrants are working age, healthy people who are moving to fill jobs. There is no evidence at all that it is EU migrants that are causing stress on the NHS. Removing the ability of the NHS to recruit EU nationals freely, without language tests and bureacracy will only damage the ability of the NHS to provide services. If the NHS is unable to perform routine minor procedures, this will hamper the productivity of the UK workforce. One of the reasons the NHS is such a national assett is that it ckeeps our workforce realatively healthy and productive. If positions in the NHS are unfilled, this will also reduce the amount of money being spent in High Streets.

This brings us on to the retail sector. This is the second highest employer in the Borough. If the financial services sector sneezes, local retailers catch a cold. Many retailers are already struggling with online competition. A Brexit will only increase pressures. It is likely that tarrifs on products will rise, Brexit supporters have not been able to explain what tarrifs will be, other than to suggest that everyone will fall over themselves to give us better deals than they've done with the EU. Of course it is possible this will happen, but I would not bet my mortgage on it. Retail is likely to suffer. I genuinely fear for what this will do to High Streets.

The third sector is the Education sector. Schools are currently creaking as they struggle to cope with the huge influx of pupils as a result of the recent mass immigration. If immigration ground to a halt, we'd very soon see a sudden reduction in the requirements for teachers and other staff in education. Again this will depress the local economy.

If we take James Dysons argument that a Brexit will improve manufacturing industries in the UK, how will this affect the UK. There are 2,900 jobs in manufacturing in the London Borough of Barnet. If we had a 20% rise in this figure (although I have no idea where the new factories would go), that would be 580 extra jobs. Interestingly the stats show that there was a 400 increase in manufacturing jobs in Barnet between 2013 and 2014, so I guess that the argument that the EU is damaging the sector is perhaps wide of the mark.

We have also got people such as Nigel Farage saying that it doesn't matter if the £ falls if we leave the EU. How will this affect the UK. It will have two effects. The price of UK products will rise. This is because other countries will find UK projects cheaper, so demand will increase and force prices up. It will also make the price of imports rise, because the £ will buy less. This will again hit retailers.  This is without tarrifs.

The Brexit campaign are making several assumptions in their message about the economy. These are

1. That the majority of economists are wrong about the effects of Brexit, whilst people such as comedian John Cleese and the Leader of the BNP Nick Griffen are right.

2. That Bankers such as Jamie Dimon at JP Morgan are simply lying or bluffing about the  effects on their business of a Brexit.

3. That every country in the world will have a team of civil servants ready to dish out preferential trade deals to the UK if we pull out of the EU.

4. That we'll be able to seamlessly build a massive new Whitehall bureacracy from scratch to vet requests from EU nationals to move to the UK.

How reasonable are these assumptions. Of course people can choose to listen to John Cleese or Nigel Farage on the issue of economics in preference to professional economists. Personally I would think that this is lunacy.

As to the concept that Jamie Dimon would lie about how Brexit will affect his business and its operation. Some people believe that banks are Satan incarnate, but given that the Financial services industry is what keeps the UK economy afloat, I find this a very puerile argument. Dimon will act in the interests of his shareholders and what is good for his business or he gets the sack. It is highly unlikely that a roaring UK economy would be bad for JP Morgan, therefore he must have concluded that Brexit will be bad for the UK and for his company.

So does every other country in the world want to negotiate a new trade deal with the Uk at preferential terms? I'm not aware of any that have said they will. If Brexit campaigners had a list of countries saying "yes, this is something we want" I'd trust them. They haven't, so I don't

On the issue of a Points system for EU immigrants. Setting up systems and bureacracies is hellishly expensive and problematic. The idea that a points system for EU citizens could be set up overnight is clearly nonsense (this is what Brexit are proposing). Can you name a govt IT system that has been delivered on time and on budget? A system to process applications from EU migrants will need offices, staff (with linguistic qualifications), computer systems and all the associated backup (HR, cleaners, etc). Presumably if we are going to test peoples language skills as suggested, we will have to set up offices all over Europe to process these applications. Oddly when I suggested this to Brexiteers, they suggested that this was unnecessary to implement a points system. When asked how applications would be processed and verified, the answer was simply "it can be done with eisting staff", which implies that there are thousands of civil servants doing nothing.

So how will it affect the economy of Mill Hill. All of the evidence I've seen tells me that Brexit would be catastrophic locally. There are parts of the country which may well do better out of a Brexit. Presumably sectors such as oil and energy would do well. There is an argument that if the £ falls manufacting & exports will improve. This is assuming that no punitive tariffs are applied. But this is unlikely to affect the City,which is the main employer for many people in Mill Hill.